Lawmakers, officials look at ways to attract more business

Monday

Jul 16, 2012 at 9:13 AM

Changes should create the incentive that businesses need to bring their operation to the state.

By Jason GonzalesJason.Gonzales@StarNewsOnline.com

Public officials were reeling after failing to nab both Continental Tire and Caterpillar Inc., and it became increasingly clear to them that their efforts to land a big business meant they would have to make the region more business-friendly.Changes first needed to start with the way North Carolina does business, state officials say.Legislators have made changes to environmental regulatory processes and they are continuing to look at tax reform to help give the state a competitive edge. "In all, we are working on a recipe to make a cake that we can sell to potential employers," said State Rep. Danny McComas, R-New Hanover.Those changes should create the incentive that businesses need to bring their operation to the state, officials said, because it's the bottom line mixed with a good quality of life that counts."Any employer will tell you that's what they are looking for," said State Sen. Thom Goolsby, R-New Hanover. Any larger incentives would need to be reviewed, he said."We have to look at if the expense outweighs the benefits," he said.Locally, governments can work to communicate better with each other, said McComas.They also can be open to what changes need to be made to local regulations, Wilmington Mayor Bill Saffo said."We are constantly re-evaluating to make sure we are not hindering business," Saffo said.What's the deal with incentives?The state took a beating after the Continental Tire deal fell through.Jim Bradshaw, director of the Brunswick Economic Development Commission, said a room full of executives told government officials this was their deal to lose."I can tell you … we had 32 witnesses," he said. "Continental Tire stood up to us after nine months … and they looked at state (officials) and said, ‘This is for you to lose,'" Bradshaw said. "And we lost it. Can you believe how sick that made us feel?" Partisan politics were largely blamed for the decline of that deal. After the fingers had been pointed, the backlash prompted many to call for a revamped incentives process. N.C. Senate leader Phil Berger said in October he would welcome input about how North Carolina should participate – or not – in the economic incentives game.The consensus of state officials, for now, seems to be friendlier tax rates and lighter regulatory standards. But most companies want up-front incentives, and Bradshaw said more and more want cash. Saffo provided some insight as to why money up-front has become the norm. "With globalization, they can locate anywhere in the country and world," he said, "And communities have to be extremely competitive to recruit businesses."He warned that "sometimes communities give away the farm.""We have to be conservative when we dole out incentives," Saffo said. "We have to make sure the company creates and invests enough to generate a tax base that offsets those incentives. "Conservative isn't bad, he said, but they have to be competitive. He pointed to the film industry in Wilmington."When we tweaked our film incentives, they were not the highest or lowest, but making them competitive has been a game changer," Saffo said.This year, television and movie productions are expected to spend between $175 million and $195 million – more than any other time in the past, Wilmington Regional Film Commission Director Johnny Griffin has said.Nonetheless, business incentives need to be decided on quick. The General Assembly signs off on all incentive deals, Bradshaw said, and added he believes the legislature should designate a special council to dole those out."Until that's changed, the same situation will occur" as losing the bid for Continental Tire and Caterpillar, he said.On the local level, there also is room for improvement, according to Connie Majure-Rhett, president and CEO of the Wilmington Chamber of Commerce.McComas agrees."There has to be more communication among local officials and among the delegation," he said. "Whether it's the county, the city or the state, there needs to be communication in both directions."Sometimes I don't hear from local officials for a good month," McComas said. "We need to work collaboratively."Making the permitting process easier would also help, Majure-Rhett said.While it varies in each county and city, New Hanover and Wilmington, especially, have been called out for being tough to work with."What would help is if we had an asset where all the answers were to apply (for permits), and there was a timeline with a good estimate of how long (they) take," Majure-Rhett said. Saffo said those are things council members like to hear."We want to hear from the community ... so we can evaluate the process, and make it easier," he said.Phil Norris, vice chairman of the Brunswick County Board of Commissioners, was more positive, saying local officials work exceedingly well with each other, because what's good for one area is good for all of Southeastern North Carolina."There is a sense of cooperation," he said. "I haven't seen any evidence of turf wars … we have coordinated our efforts for the benefit of all."But because politicians are one of the strongest representatives of the community, they must always be mindful of how they conduct themselves, Majure-Rhett said. She asked that officials try to always put their best foot forward, because how they conduct business paints a telling picture for businesses."They need to always be at their best," she said. "Government is pretty transparent these days (with access to different types of media), and that means they need to do the right thing, and behave well too."`